Nearly one in five charities ‘struggling to survive’

28 February 2017

Charities are restructuring, downsizing and joining forces with other organisations as they struggle to raise enough money to meet growing demand.

The UK’s biggest survey of charity chief executives reveals that almost one in five (18%) fear their organisation is struggling to survive, rising to more than one in four (28%) among charities with an annual income less than £1 million.

The Social Landscape 2017 report, published today by the Charities Aid Foundation, reveals that rising demand and an increasingly tough financial environment may be pushing some organisations to breaking point. More than a third had to dip into their reserves last year to cover income shortfalls (35%).

The research, carried out with ACEVO, reveals that charity leaders’ biggest challenges this year are generating more income and achieving financial sustainability (57%), meeting demand for services (36%) and a reduction in public and government funding (34%).

The overwhelming majority of charities saw an increase in demand for their services over the past 12 months (82%) while an even greater number expect to see demand growing over the next 12 months (86%).

However, charities are less confident than they were a year ago about their ability to meet it. Only one in seven chief executives (14%) said they were completely confident they would be able to cope with growing demand, while over a quarter (26%) had little or no confidence their organisation would be able to do so.

Charities are responding with a raft of efficiency and modernisation measures:

Three in five (61%) say they either have restructured in the past 12 months or will be doing so in the next 12 months.

One in three (33%) has reduced or is set to reduce staff numbers and down size the organisation over the same period.

More than a quarter (28%) say they have or will be reducing front-line services. This compares to 19% who said this was a case when the same research was carried out in 2015.

One in ten (10%) has plans to merge with another organisation over the next 12 months. More than three-quarters (76%) say they have or will be partnering with another not-for-profit while almost half (49%) say they have or will be collaborating with a private sector organisation.

Most are looking to the future with recent or upcoming plans to increase their social media presence (85%), invest in new IT technology and online solutions (79%) and introduce new methods of giving (59%).

John Low, Chief Executive of the Charities Aid Foundation, said:

"Almost everyone in Britain benefits from the work of a charity and the demand for their services and support shows no sign of abating. This means that all of us have a stake in how the voluntary sector is faring.

"In 2017 charities are facing ever-growing pressure on already-stretched resources. They are less confident than they were a year ago that they'll be able to meet this demand. In some cases they are being stretched to breaking point. Faced with tough times, charities are restructuring, reducing staff and in some cases adapting their mission.

“Charities remain optimistic despite an unpredictable political climate, a challenging economy and public sector funding cuts and are getting on with the job of improving people’s lives and making a positive difference in the years ahead.

“At this pivotal time as we prepare to leave the EU, charities have a big role to play shaping British society. It is essential that MPs and policymakers work with the voluntary sector and acknowledge the pressures charities are facing if we are to get the full benefit of charities’ experience and expertise in the uncertain times ahead.”

Vicky Browning, Chief Executive of ACEVO, said:

“Charities make an invaluable contribution to the country at a national and local level. But this contribution is not always recognised by the public or fully appreciated by government. The Social Landscape Report provides evidence that charities are facing a perfect storm of rising demand and decreasing funds in a time of challenging economic conditions and volatile public trust.

“It is essential that local and national government work to protect the longer term capacity of the voluntary sector and the irreplaceable role that these organisations play in our communities.”

The Charities Aid Foundation (CAF) helps people and businesses give to the causes they care about and provides financial services to support charities.

For a copy of the full embargoed Social Landscape 2017 report email media@cafonline.org

Data is based on questions that CAF asked charities as part of the Association of Chief Executives of Voluntary Organisations (ACEVO) Pay and Equalities Survey 2016, which collected information from chief executive officers of organisations in the voluntary sector. The CAF questions were asked of 472 respondents completing the ACEVO survey. The sample was drawn from CAF Bank customers and individual members of ACEVO, ACOSVO and CO3. Together, these bodies cover a good breadth of organisations from across the diﬀerent parts of the charity world in England, Scotland, Wales and Northern Ireland, including smaller organisations